Editor’s note: The following are remarks of Richard Cullen, Visiting Professor of Law at Hong Kong University, at the International Symposium On The Communist Party of China's History of 100 Years, held in Hong Kong on June 16, 2021.
One Hundred Years of Difference
In 1921 the population of China was over 450 million. The population of the USA was about 110 million at the same time. The GDP of America 100 years ago, according to one OECD study, was over US$600 billion (based on updated-to-1990 figures). The GDP of China at that time was estimated to be US$250 billion.
Today, the population of China is still around four times larger than that of the USA. Based on Purchasing Power Parity (PPP) figures, Nomura Holdings estimates that China's total GDP overtook that of America in 2017. According to the Centre for Economics and Business research (CEBR) in the UK, China's economy is set to exceed the size of the US economy using straight GDP figures by 2028.
These remarkable improvements to China's economic standing are even more striking when we consider a shorter time-span.
After both the First World War and the Second World War, the US grew at a prodigious rate. Amongst all the major belligerents, in both cases, its home economy was left comparatively unscathed. China, meanwhile endured, over several decades, both a terrible war, in China, arising from unprecedented Japanese aggression and a massively destructive Civil War. After 1949, recovery remained slow. The Korean War began and the possibility of the Civil War recommencing was real. China, internally, grappled with major tensions over primary economic and political policies. Two extended periods of damaging turmoil were endured during the Great Leap Forward and the Cultural Revolution. Just over 40 years ago, with the commencement of the Open Door policy, China reset its economic policies firmly and clearly.
What we have experienced in Hong Kong in response to the immense challenges generated in 2019, is the crucial application of rational complex problem solving set within a dominant and guiding overall plan: “one country, two systems” (OCTS).
Let's now consider the comparative positions around 1980. World Bank and IMF figures, confirm that, in plain GDP terms, the US economy was, by 1980, almost 14 times larger than that of China, based on a population still only 25 percent of the size of China's population. On a per capita basis, the US economy was well over 50 times larger. In less than forty years, China's total economy overtook the US economy – in 2017 – using a PPP measure and it may overtake the US economy – based on raw GDP figures within several years – by 2028 -. These are astounding achievements, unprecedented in world history -most of all, because, as they have unfolded, China has lifted over 800 million people out of abject poverty.
The editors of a recent 700 page study of post-1978 China, published by the Australian National University (ANU) in 2018, put it this way – and I quote:
China's reform and opening up is in the process of delivering to 1.4 billion Chinese people the fruits of the most consequential socioeconomic change and institutional innovation in human history.
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That same study observed that between 1978 (the beginning of the Open Door policy) and 2018, total Gross Domestic Product (GDP) in China rose around 45-fold from US$218 billion to over US$10 trillion (measured in US dollars using 2010 prices). The Economist and other publications have noted how the People's Republic of China (PRC) had expanded its Middle Class at a remarkable rate over the last 20 years. World Bank figures show how China, alone, has been responsible for over 70 percent of total world poverty reduction over the last several decades. Over the next two decades (or less) the Chinese middle class may grow to be more than double the size of the US middle class.
According to a 2013 Assessment arising from the US-based Pew Survey of Global Attitudes, 85 percent of Chinese were "very satisfied" with their country's direction compared to 31 percent of US citizens. More recently, a long-term, comprehensive PRC survey was published by the Ash Center based at Harvard University. A 2020 survey was also published by the China Data Lab at the University of California, San Diego last year. Both confirmed that the high levels of confidence indicated in the Pew survey have been sustained.
Given the steadily rising living standards of so many and the extraordinary reduction in abject poverty levels it is not surprising that China is a state which enjoys comparatively high, continuing levels of general, unassuming confidence and optimism. China has managed to rebuild itself relying fundamentally on its most abundant resource, its own population. It has traded and educated itself to be where it is placed in the world order today. China has taken the best advantage of the Western developed world trading system, that is true. But every other large impoverished nation has had the same basic opportunities – in a number of cases blessed with natural resources China can scarcely dream of. Only China has managed this astonishing level of real growth for the benefit of hundreds of millions of people.
As China's opening up gathered pace, the PRC has faced a huge range of problems including severe challenges related to: housing, education, medical services; environmental damage; governance-transparency; corruption; the legal system; public finance; and very high debt levels, for example. Extraordinary progress has been made in addressing such problems but both old and new challenges in the areas listed persist within an economically transformed China. They are accompanied today by rising public expectations and deep concerns about a large ageing population.
All these achievements are the product of immense hard work encompassing all of China's huge population. However, they have required fundamentally effective methods of political, economic and social organization on a scale never before seen in world history, as the ANU report notes.
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A book published in 2018, China's Regions in an Era of Globalization, shows, using a robust regional case-study analysis, how complex development plans are forged, applied, evaluated, adapted and applied again, in China. Not a few Western commentators assume that successive Five Year Plans and other such policy documents are largely ceremonial. This book, however, shows the many ways in which they have shaped long-term positive developments. Such plans are not perfect, of course. But, overall, they work and work very well.
Detailed planning of this sort is too easily dismissed in the West. In fact, we can clearly see, today, an unfavorable consequence of the absence of such planning. The new US President, Joe Biden, has proposed spending well over US$4 trillion on Rebuilding the American Dream. This is on top of combined spending since 2020 of around US$4 trillion to help the US cope with its own manifest mishandling of the COVID pandemic over many months. In total, this is more than a third of US annual GDP in extra spending – so far significantly unfunded. Even more striking, is the remarkable absence of any long-term comprehensive planning designed to ensure effective coordinated spending of these huge amounts. So far, it seems that the overall plan is: (A) to identify certain pivotal problems (regularly relying on comparisons with China to indicate lagging US performance); and (B) to shovel huge sums of borrowed money at the problem(s).
A Short Hong Kong Observation
Let me conclude by briefly observing how vital this combination of far-reaching planning and rational problem solving has been for the HKSAR. The crucial long-term plan for Hong Kong, created by China, which has fundamentally shaped the contours of the Sino-British Joint Declaration of 1984 and, most importantly, the terms of the Basic Law of the Hong Kong Special Administrative Region (HKSAR) is the remarkable “one country, two systems” (OCTS) formulation.
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OCTS has, on occasions, been subject to acute stress-testing. From mid-2019, we experienced an exceptionally violent and destructive insurgency in Hong Kong. It spun off from a series of major protest marches and lasted for many months. The level of violence and destruction during the insurrection grew so intense that many in Hong Kong wondered what may become of the HKSAR. The central government in Beijing chose to watch and observe and ultimately deal with these grave threats to fundamental stability, once basic order was re-established, by relying on essentially legal means – the new National Security Law and Electoral Reforms – both applied within the OCTS framework.
These are radical reforms to the broad Hong Kong legislative framework. But they are considered and measured reforms. They are, above all, designed:
• To ensure that an insurrection such as we experienced in 2019 cannot happen again;
• To reform and recast the basic political foundations in Hong Kong to protect OCTS; and
• To ensure that the HKSAR is well placed to make the very best of its future within China.
What we have experienced in Hong Kong in response to the immense challenges generated in 2019, is the crucial application of rational complex problem solving set within a dominant and guiding overall plan: OCTS. That same experience also confirms the acute observation of the British philosopher, John Gray, who argued almost 20 years ago, that, "If you want to be free, you need first to be safe".
The views do not necessarily reflect those of China Daily.